Also in Wealth Adviser

“He said that he felt like he needed to make some changes,” says Mr. Carr, partner with Retirement Strategies, which manages $280 million for 250 clients in Jacksonville, Fla.

Mr. Carr offered to put the client in touch with an estate attorney to enact those changes, but the client declined, saying he would do it himself. The adviser reminded him a few more times over the course of a few years, but he didn’t want to be too pushy. The client valued his privacy and wasn’t interested in discussing the issue further.

Then the man died, leaving $2 million in a trust for his wife as well as another $2 million in the family trust. His two children were still designated as co-trustees with their mother. Without informing his children, he’d also left the vast majority of the family trust’s assets to his grandchildren, willing his kids just $50,000 a year each.

Bill Carr

With the passing of his client, Mr. Carr felt a responsibility to both explain the estate plan to the children and then find a way to have them step down as trustees as their father had intended.

“For all of our clients, we are obligated to act in their best interest,” Mr. Carr says. “I cared about these people and I had so much admiration for how my client lived his life. When you have worked with somebody for so long, you can’t just walk away.”

First, he called separate meetings with the two children--who didn’t get along--to explain how the trust would work and what they would and wouldn’t get. As expected, their feelings were hurt and they wanted to know why they didn’t receive more of their father’s assets.

“I had to admit that I didn’t know,” he says.

Then, Mr. Carr checked with the client’s wife to ensure that she and her late husband had still wanted the children to be removed as co-trustees. She said yes. The son had a history of mismanaging money, while the daughter was in poor health. It wasn’t a good fit.

The adviser also checked with legal counsel, who suggested that if they asked the son and daughter to step down, they should ask the wife as well to avoid potential legal trouble in the future. The client’s wife was willing to relinquish her role for the cause.

So the adviser met with the children again. He explained that the job of the trustee was to simply carry out the wishes in the trust document. He told them they couldn’t change how the money was distributed or the amount they received. He noted that they’d have to work together. Then, he asked them if they still wanted the job.

“They didn’t need any convincing to step down,” Mr. Carr says

The man’s wife suggested naming another relative, an accountant, as trustee, and Mr. Carr set to work enacting the plan his client had wanted. The process took nearly 40 hours of work, but Mr. Carr says that making the situation right was worth it.

He also learned a valuable lesson.

“Whenever we look at estate plans, it’s our job to see beyond the instructions to the end result,” Mr. Carr says. “The next time a situation like this arises, I’ll be much more vocal with my clients and really push them to make the changes they want, even if it risks the relationship.”